Addendum to My Disertation on a Subchapter "S" or regular "C" Corporation vs LLC's

Hey Folks, I recently receive a couple of Private Messages from DG Family members saying they liked my Dissertation on moving away from the LLC, or just using it during your start up stages. First, let me post this educational site about Arizona Corporations.

http://www.keytlaw.com/azcorp/index.htm

Now while I am NOT an Attorney, in my past I have set up inexcess of 60 Corporations in the State of Oregon, this during an intense period of Social Activism in Eugene and Lynn=Benton County They were mostly Non-Profit Corps 501-(c)(3's) which are more for administration purposes; a couple 501-(c)(1) which were Foundations, and then my personal company Corporation in Tacoma, WA, a Regular "C" Corporation. In California in the 90's I set myself up as a Sub Chapter "S" Corporation which is what I primarily suggest for you folks out there.

I am going to see how I have this blog set up. What I'm going to do is continue contributing to this subject on a regular basis. A couple of points I'd like to make her however: If you can afford it (usually between $1,000-$1,500) have an Attorney set it up for you. If that's too much for you, many independent Para-Legals set them up for $500 (an average fee in those other 3 states) PLUS all your filing fee's. ALSO, it is more time consuming then it is difficult to set it all up yourself. It's a great thing to do and learn for yourself! I won't get into why here and now. But if it is something you want to take on, send me a private massage and we can entertain a dialogue and I will aid you where I can. 95% of all the information, the process and other details are the same State-to-State. Of course fees vary.

ONE MORE IMPORTANT POINT: Many, and I mean MANY accounts will steer you away from flipping over. IT IS NOT in many of their interests that you do so. This is because when you do so, you will/SHOULD, review your Accounting Practices. What often happens, and quite rightfully so, you will end up moving to a CPA who handles Corporate Taxes. Granted, they all basically do as does you long time, probable close friend who has been doing your work of recent or all these years. YOU MUST CONSIDER SWITCHING! ASLO, talk to other large Investors or other R/E friends or associates for a REFERRAL. This is the best way; however, also consider walking through the Yellow Pages, looking at the Ad's under CPA, and consider taking 3-5 meetings. DO NOT jump at the first one. Tell them what you are doing, what stage your business has developed to, or tell them you are just starting off and/or are an LLC and that you are converting over to a non LLC Corporation. ASK THEM ABOUT THEIR CHARGES FOR QUARTERLY AND YEAR END TAXES: PERSONAL AND CORPORATE> This is vital if you set up a Sub-Chapter "S" corp, because while you will end up keeping your LLC Name & Transferring it to the new Corp, you will need to set up a separate "Sole Proprietorship" to capture the Tax Advantages, and will be part of your personal Taxes under Schedule "C".

So you can see that you MIGHT be changing to a CPA, and one who specialized in Real Estate. Hey, you can always call the DG Office and see if they have any referrals, or post on the DG Site for a Family Member. That is what I'm going to do! When I get mine set up here in Arizona I will post who I'm working with.

Just like your other R/E Team Member, your CPA is also one. If you've been doing this business for a while then you already know this. And also, if you've been doing this for a couple years and you are still an LLC, well, then honestly, I am of the opinion you Should have been guided to switch over. Most who will disagree will site, "I was told I'll be paying more taxes!" That's a common agrument. NO, You Will Not. What you will be paying more for are fees for Doing Your Taxes. And trust me, all CPA's are NOT the same. They are not "Good" JUST because they are your Friends.

Also as a rule of thumb, being a small business (under $50 million a year), it is NOT WISE to go to your Attorney for a referral. For the most part, until you have the money, cash flow and business activity where it is beneficially to have a Tax Attorney, it's best to keep the Lawyers & CPA's separate so they do not conspire to Fraud. Oh yeah, happens all the time! How does this happen? Hey, it doesn't matter how big or how small you are, it happens and can go on for years and you'd never know about it: JUST ASK WILLIE NELSON, BOB DYLAN and the list goes on. Bob Dylan got screwed when he was young and starting out, by the Record Companies, Attorneys & Accountants. The Industry makes no difference at all: Music, Real Estate, making widgets.

Hope this helps... I Googled "learn about Arizona Corporations" and found the above site. You can do the same in your state.

Good Luck and Keep Me Informed. Any feedback by Attorney's & CPA's who might read this blog is certainly welcomed. Correct me, whatever floats your boat.